We teach our children history as if we are preparing them for Kaun Banega Crorepati , that popular reality show hosted by Amitabh Bachchan. The system is geared to answering questions such as ‘when did Babar invade India, which year did Shahjahan get married to Mumtaz', and so on. It is all about who did what and when.

This wouldn't have mattered much if the idea is to prepare them for a reality show on television rather than equip them to face the reality of life. The student gets a perspective of history as a static record of final outcomes rather than as a continuous flow of events involving people, each one connected with the one that follows.

I can testify to this, as I have been a victim myself. The occasion was the English class in the pre-University Course (Class XII, in today's parlance). The professor was making a point about how comparisons can sometimes be odious (Prof Vasanthan, I hope you are reading this!). He exclaimed in a somewhat dramatic fashion, “Look, Swami Vivekananda was a chain smoker and I too am a chain smoker. But that doesn't mean I am another Swami Vivekananda”.

Now, I don't want to get into a debate about whether Swami Vivekananda was a chain smoker or not. I am bringing this up just to record how I responded to that assertion which, in a way, proves my point about the structural flaw in the teaching of history at the school level. I thought then that what the teacher was saying simply couldn't be true because smoking is a more modern day phenomenon while Vivekananda, thanks to my flawed conception of history, seemed to belong to the hoary past, to be clubbed with such things as exploits of Emperor Ashoka or the Mauryan dynasty.

I was, of course, wrong on both counts. The public dalliance with tobacco dates back to a time long before Imperial Tobacco Company made its debut in India. Swami Vivekananda is as modern as the 20{+t}{+h} century, never mind that a discussion on his contribution to India's cultural renaissance is clubbed in some pedantic way with that on Kings of the Mauryan era.

I was no whiz at studies in my school days but neither did I belong in the bottom 10 percentile. So, if I thought Swami Vivekananda belonged to an ancient era, surely the fault lay only with the system and not with me, was how I reasoned.

ONSET OF LIBERALISATION

Fortunately, a study of economic or business history doesn't condemn us to viewing developments in these fields in such static terms. The framework is different and the events we deal with are not so deterministic as the birth and death of kings and nobles. We can really speculate on such things as whether India liberalised its economy in 1991 or some point of time earlier to that.

Most critics are of the view that liberalisation of the economy was set off when the Government abolished the licensing requirement for all but a tiny list of industries in July 1991.

A few would put this a little further back in time, in the mid-1980s, when the then Prime Minister, Rajiv Gandhi, ushered in the concept of broad-banding of products for licensing purposes, besides granting an automatic 25 per cent expansion in capacity annually.

In my book at least, the policy of liberalisation is at least half a decade older than what the most charitable critics put it at. It was in 1980 that the former Maharashtra Chief Minister A.R. Antulay realised to his misfortune that it was not alright for his Government to allot cement to those who desperately needed it, just days after they made a donation to one of the innumerable trusts floated by him. What followed was sensational.

A disgusted Indira Gandhi gave out licences for manufacture of cement to practically anybody who asked for it. I suppose she had no particular moral objection to the act of taking donations to trusts set up by him.

ANOTHER ECONOMIC MODEL

By the standards of 2G and Commonwealth Games scams of today this was actually bordering on the innocent and, at a pinch, could have even been passed off as an example of public-private partnership that is all the fashion these days!

Her disgust sprang not so much from a sense of moral repugnance as from the embarrassment of a partyman being held in public ridicule.

She realised to her horror that the policy of a ‘controlled economy' conceived of by her father Jawaharlal Nehru and nurtured later during her reign had been subverted by the subaltern class within the ruling elite with active connivance by the bureaucracy that prompted Prof Jagdish Bhagwati to describe it as the ‘treason of the clerks' in his book on economic reforms.

How is all this linked to pushing the reform clock backward by as much as a decade? This is how. When licences were given out in driblets and after long deliberation, as the Central government did prior to 1980, it helped sustain a belief that capital had to be carefully allocated, and capacities for production of goods cannot be granted in an indiscriminate fashion.

Implicit in the model was the assumption that such controlled allocation of capital and productive capacity was working perfectly and that there were no shortages of any kind.

Antulay's act of linking donations to trusts controlled by him and cement allocations by the State administered by him rendered any belief in the notion that demand and supply for a product is in perfect eternal balance impossible to sustain. What is more, when licences were issued for manufacture of cement and capacities came up at regular intervals, neither did the market for cement collapse from a sudden unravelling of a carefully-crafted equilibrium nor did the need for capital in other industries dry up.

For the public this was the moment of recognition similar to what they felt in the Hans Christian Andersen's tale about the emperor's new clothes.

The implication of pushing the reform table back by 10 years means we have had 30 years of controlled economy and another 30 years of free markets. Is the clock about to turn again?

High inflation, sluggish growth and corruption in high places are prompting people to look for an alternative architecture of economic growth.

Related Topics